Bitcoin Retail Investor Holdings Continue Incremental Growth

01-03-2019

While institutions may still remain on the sidelines, on-chain data for Bitcoin addresses shows that retail investor attitudes remains strong and in fact a key growing group in supply holdings. Although still representing a small portion of circulating supply, at least in on-chain terms, month-on-month for addresses holding 1 to 10 Bitcoins have always shown a positive increase in holdings with 2019 already seeing an uptick in growth after petering out last year compared to previous years that saw a 35% annual increase on average.

Addresses holding anywhere between 1 and 10 Bitcoins now represent nearly 10% of the circulating supply. These addresses according to data crunching by Diar have seen a positive number of growth year-on-year (see chart).

Despite the bubble burst, Bitcoin holdings in these addresses increased by 5% since Bitcoin's peak. Since January 2017 to date, the most popular band of address holdings have seen an increase of 38% with an average of 35% increase year-on-year since 2015.

And while 2018 saw a very small increase compared to previous years, a tiny 0.7%, things have quickly started to pick up again with a 3% increase in addresses holding Bitcoins within the 1-10BTC band since the start of the year.

Rounded figures in smaller addresses unlikely to be those of exchanges and cold-storage do show retail investor attitudes. And should such a trend continue, retail investor holdings could mark a significant amount of supply found on-chain within the next few years alone, currently valued at just over $6Bn.

|| SAVE SOME BITCOIN

Telling is the very fact that 91% of addresses that have been discriminatorily rounded up to the nearest Bitcoin have never made an outgoing transaction (see chart). And on the flip-side those who have made an outgoing transfer left behind a neat number of Bitcoins.

97% of addresses holding either 5 or 10 Bitcoins have not moved since landing into wallets. Still, this is only a small representation of 2% of Bitcoins. But the growth has been fairly evident although unlikely to have the ability to move markets.

|| EVEN STEVEN SELL PRESSURES

While the numbers highlight a real zeal by retail investors to hold onto some Bitcoin, the majority of holdings have been in safekeeping since below current prices alleviating possible downward price pressures.

55% of addresses holding exactly 5 Bitcoins (approx. 60k Bitcoins) been placed in wallets before September 2017 when the month averaged at $4000/BTC. The number is a close 49% for addresses with exactly 10BTC (88k Bitcoins).

That also means that approximately 75k Bitcoins in these "investment-type addresses" where allocated, not necessarily purchased, while Bitcoin was trading above current levels.

|| DEPENDS ON WHICH WAY YOU LOOK AT IT

A majority of circulating supply, 48%, that sit in addresses between 10 and 1000BTC have seen a decline in holdings since last year (see chart).

Whilst these addresses could very well belong to exchanges, the underlying trend is quite clearly shifting downwards for larger addresses. And though slow, this could be an indication of a better wealth distribution of bitcoins.

It also could indicate an exodus of larger investors and lack of interest from new big money also.